- Policy uncertainty pushes portside prices higher
- Buyers resist higher prices, turn to domestic coal
Indian portside prices of Indonesian-origin thermal coal registered a sharp week-on-week (w-o-w) increase, as assessed on 6 March 2026, primarily driven by uncertainty surrounding Indonesian government policies and heightened geopolitical tensions between the US and Iran.
The lack of clarity regarding export approvals from Indonesia, coupled with broader global concerns, has created a volatile market environment. Market participants indicated that sellers have adopted a cautious stance, with some withholding sales in anticipation of further price increases, while buyers remain hesitant to accept the elevated price levels.
Buyers resist higher offers despite bullish sentiment
Despite the sharp rise in offers, market activity has remained relatively subdued as buyers show limited willingness to transact at the revised prices. Traders noted that the current rally is largely sentiment-driven, supported by policy concerns and geopolitical developments rather than a significant improvement in underlying demand. As a result, several buyers have deferred procurement decisions, awaiting clearer signals on supply conditions and price stability.
Shift toward domestic coal and alternative fuels
The availability of alternative fuels is also influencing purchasing patterns in the domestic market. In western India, industries that typically consume lower-grade imported coal, particularly around 3,400 GAR, are increasingly considering lignite supplies from Morbi and Bhavnagar due to cost advantage. Meanwhile, several industrial users in northern India are opting for domestic coal grades ranging from G1-G10, depending on plant design and operational requirements. This shift toward domestic fuel sources is partially offsetting the demand for imported coal.
Portside prices approach multi-year highs
Thermal coal prices at major Indian ports continued to strengthen, approaching nearly three-year highs during the assessment period. According to BigMint’s latest assessment as on 6 March, 5,000 GAR coal prices increased by INR 950/t w-o-w to INR 9,300/t at Kandla and INR 9,200/t at Vizag.
Similarly, 4,200 GAR coal prices rose by INR 1,000/t w-o-w to INR 7,500/t at Kandla and INR 7,400/t at Vizag. Lower-grade 3,400 GAR coal prices also increased by INR 1,000/t w-o-w to INR 5,900/t at Navlakhi, reflecting the broader bullish sentiment in the market.
Port and power plant inventories decline
Coal inventories at Indian ports declined by 3.6% w-o-w to 13.14 mnt in the week ended 27 February, compared with 13.63 mnt in the previous week. The reduction in stock levels follows a recent peak and is largely attributed to cautious buying behaviour amid rising import offers and uncertainties related to Indonesian export approvals.
At the same time, coal stocks at Indian power plants also recorded a week-on-week decline, reaching 59.13 mnt as of 5 March 2026, which is sufficient for approximately 19 days of consumption. Notably, 17 power plants are currently operating with critical coal stock levels, including eight plants dependent on domestic coal, six designed for imported coal, and three operating on washery rejects.
Indonesian benchmark prices trend up
Indonesian benchmark coal prices also recorded w-o-w gains, reinforcing the bullish sentiment in the international market. During the period, prices for 5,800 GAR coal increased by $2.35 – 2.4/t, while 4,200 GAR coal witnessed a sharper rise of $4-4.5/t. Meanwhile, 3,400 GAR coal prices edged up by $0.8 – 0.9/t, reflecting relatively moderate demand for lower-grade material.
Freight costs add to import pressures
Freight rates for coal shipments to India also increased during the week, further raising the landed cost of imported coal. According to BigMint’s freight assessment, Supramax vessel freight from East Kalimantan to Navlakhi rose by $2.7/t w-o-w to $17/t, adding additional cost pressure for importers.
Outlook
Indian portside thermal coal prices are expected to remain volatile in the near term due to uncertainty over Indonesian export policies and Middle East geopolitical tensions. However, the recent rally may be short-lived as buyers resist higher offers and increasingly shift toward domestic coal and alternative fuels such as lignite, which could lead to price stabilisation if market uncertainties ease.
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